WASHINGTON, DC - The Department of Justice, the U.S. Environmental
Protection Agency and the State of Kansas today announced a civil settlement
with the U.S. Energy Partners LLC, ethanol plant in Russell, Kansas for
alleged Clean Air Act violations. The settlement mandates reductions in air
pollution, including volatile organic compounds, carbon monoxide, nitrogen
oxides and particulate matter from this ethanol manufacturing facility. This
is the third settlement with a company in the ethanol industry following a
series of settlements reached in 2002 with a group of ethanol companies in
Minnesota as a part of EPA’s continuing examination of the ethanol industry.
The settlement is set forth in a consent decree filed in the federal court in
Kansas.

The United States and the State of Kansas allege that the facility was
operating in violation of the Clean Air Act’s New Source Review (NSR)
provisions. The Clean Air Act’s NSR program requires a new source of emissions
to install pollution controls and undertake other pre-construction obligations
to prevent air quality problems.

The agreement announced today is consistent with prior settlements and will
ensure that the plant installs air pollution control equipment to greatly
reduce air emissions such as volatile organic compounds (VOCs) and carbon
monoxide (CO) emissions. In addition to contributing to ground-level ozone
(smog), VOCs can cause serious health problems such as cancer and other
effects; CO is harmful because it reduces oxygen delivery to the body’s organs
and tissues. The settlement will result in annual reductions of 1240 tons of
VOCs, 10 tons of nitrogen oxides (NOx), 75 tons of particulate matter (PM),
170 tons of CO, and 30 tons of hazardous air pollutants.

“This consent decree demonstrates our commitment to the reduction of harmful
pollutants from ethanol plants and shows that we will work to ensure a level
playing field within the industry by preventing violators from gaining a
competitive advantage,” said Tom Sansonetti, Assistant Attorney General for
the Environment and Natural Resources Division of the Department of Justice.

"This agreement, and the pollution reductions from ethanol plants that will
result, are of great importance," said Thomas V. Skinner, Acting Assistant
Administrator for Enforcement and Compliance Assurance. "Ethanol is a part of
our national energy strategy, and it is encouraging that the ethanol industry
is acknowledging the value of compliance."

“Significant air pollution emission reductions will be achieved under this
settlement,” said Jim Gulliford, Administrator for the U.S. Environmental
Protection Agency, Region 7. “The cooperation of the facility and the teamwork
among agencies has resulted in an agreement that ensures that human and
ecological health are protected.”

Ethanol is primarily a corn product used as an automobile fuel alone or
blended with gasoline. Ethanol’s high oxygen content allows automobile engines
to combust fuel better, resulting in reduced tail pipe emissions. During the
ethanol manufacturing process, dry mills generate gasses that emit volatile
organic compounds and carbon monoxide into the air.

In 2002, then EPA Regional Administrator Skinner met with representatives from
the ethanol industry to discuss recent emissions test results and proposed
pollution control technology. The resulting settlements, with 12 Minnesota
ethanol plants, compelled those facilities to install thermal oxidizers to
reduce VOC emissions by 95 percent. Those companies also paid penalties
ranging from $20,000 to $39,000.

Likewise, under this settlement, the plant will install a thermal oxidizer
that reduces VOC emissions by 95 percent from the feed dryers and meet new,
more restrictive emission limits for NOx, PM, carbon monoxide and hazardous
air pollutants. In addition to emission control requirements valued at about
$2 million, the facility will also pay a civil penalty of $30,000, which is
consistent with the Minnesota settlements.

The State of Kansas, through the Kansas Department of Health and Environment
teamed with the United States in the settlement negotiations to resolve the
company’s alleged violations and to bring the facility into compliance.

The consent decree was lodged in federal district court in Kansas and is
subject to a 30-day comment period.

More information on EPA’s ethanol enforcement initiative is available at
http://www.epa.gov/compliance/civil/programs/caa/ethanol/.